<PAGE>
LETTER FROM THE PRESIDENT
Dear Shareholder:
Following is Colonial High Income Municipal Trust's semiannual report for
the six months ended June 30, 1995. Your Fund is designed to provide investors
with a high level of tax-exempt income and an attractive relative total return
through investments in rated and non-rated municipal bonds.
Rated bonds are selected for their relative value and expected total
return. This characteristic may have a positive impact on the Fund's net asset
value and total return. Non-rated bonds, on the other hand, are perceived by
investors as being somewhat more volatile because they have not been rated by
the major bond rating agencies. These bonds may therefore provide superior
yields to rated bonds of similar quality.
FUND PERFORMANCE (1/1/95 - 6/30/95)
<TABLE>
<S> <C>
Distributions declared per share(1) $0.299
-------------------------------------------------------------------------------
Annualized distribution rate on 6/30/95, based on net asset value
(NAV) 7.03%
-------------------------------------------------------------------------------
Taxable-equivalent distribution rate on 6/30/95, based on market
price(2) 11.64%
-------------------------------------------------------------------------------
Six-month total return, based on NAV and assuming reinvestment of all
distributions 8.03%
-------------------------------------------------------------------------------
Six-month total return, based on 6/30/95 closing NYSE market price,
assuming reinvestment of all distributions 17.05%
-------------------------------------------------------------------------------
NAV on 6/30/95 $8.29
-------------------------------------------------------------------------------
NYSE market price per share on 6/30/95 $7.750
-------------------------------------------------------------------------------
</TABLE>
ECONOMIC/MARKET OVERVIEW
The U.S. economy may be coming in for the "soft landing" that has been the
Federal Reserve Board's goal for the last two years. Annualized gross domestic
product (GDP) for the first three months of 1995 was 2.8%, down significantly
from the annualized GDP of 5.1% for the final quarter of 1994. This weakness in
the U.S. economy, which translated into lower interest rates, had a favorable
impact on the municipal bond market. As the pace of economic growth diminished,
interest rates moved lower and prices in the municipal bond market improved.
Some of the Fund's industrial revenue bonds are issued by corporations. At
a time when corporate profits are historically high, such bonds have been a
source of attractive returns.
SUPPLY AND DEMAND
Although interest rates have declined in recent months, there has not
been a significant increase in refinancing activity. At the same time, the
new issue supply of municipal bonds remains limited. Colonial management
believes that the supply of new issue bonds may go as low as $114 billion
by the end of 1995, down from a high of $292 billion in 1993.
[Photo]
John A. McNeice, Jr.
President
INVESTMENT STRATEGY
Although the Fund maintains a diversified portfolio, certain high yield
sectors, including paper and airlines, have recently been a focus, due to
elevated levels of profitability.
On June 30, the Fund owned 138 individual issues in 33 public sectors. More
than 60% of the securities in the portfolio were non-rated, and more than 35%
were rated. The rated bonds included some higher-yielding, lower-rated
securities.
During the semiannual period there was a decrease in non-rated and
higher-yielding rated investments, with a corresponding increase in investments
in investment-grade bonds. While higher yielding bonds may offset price declines
during periods of rising interest rates, when interest rates decline, higher
quality bonds may offer greater potential for capital appreciation.
As expected, interest rates have moved lower during 1995. Although there
may be periods of consolidation when rates move slightly higher, we believe the
overall interest rate trend will continue to favor municipal bonds.
Sincerely,
/s/ John A. McNeice, Jr.
------------------------
John A. McNeice, Jr.
President
August 11, 1995
(1) A portion of the Fund's income may be subject to the alternative minimum
tax.
(2) The taxable-equivalent distribution rate is based on the maximum federal
income tax rate of 39.6%.
<PAGE>
INVESTMENT PORTFOLIO (UNAUDITED, IN THOUSANDS) JUNE 30, 1995
<TABLE>
<CAPTION>
MUNICIPAL BONDS - 98.9% PAR VALUE
-----------------------------------------------------------------------------
<S> <C> <C> <C>
CERTIFICATES OF PARTICIPATION - 1.3%
CA Statewide Communities
Development Corp.,
5.000% 10/01/23 (a) ................. $ 3,000 $ 2,576
MA Health and Educational Facilities,
Independent Living Bonds,
Series 1993-A,
8.100% 07/01/18 ..................... 745 743
--------
3,319
-----------------------------------------------------------------------------
CONSTRUCTION - 0.8%
BUILDING CONSTRUCTION - 0.8%
IN Hammond Sewer & Solid Waste Disposal,
American Maize Products Co.,
Series A,
8.000% 12/01/24 ..................... 2,000 2,118
-----------------------------------------------------------------------------
EDUCATION - 0.9%
NY State Dormitory Authority,
City University Consolidated Bonds,
Series 1993-F,
5.000% 07/01/20 ..................... 2,900 2,385
-----------------------------------------------------------------------------
FINANCE/INSURANCE/REAL ESTATE - 0.4%
REAL ESTATE - 0.4%
MD Baltimore,
Economic Development,
Park Charles Project, Series 1986,
8.000% 01/01/10 ..................... 970 1,020
-----------------------------------------------------------------------------
GENERAL OBLIGATION - 3.5%
AZ Apache County School District,
Number 010 Round Valley
Project of 1987, Series 1990-C,
9.875% 07/01/05 ..................... 2,000 2,238
CA State of California,
5.750% 03/01/19 ..................... 5,000 4,725
PR Commonwealth of Puerto Rico:
5.375% 07/01/22 ..................... 1,250 1,158
Series 1993,
3.320% 07/01/08 (b) ................. 1,920 (c) 727
--------
8,848
-----------------------------------------------------------------------------
HEALTH - 32.5%
HOSPITAL - 10.0%
AL Alabama Special Care Facilities Authority,
Montgomery Healthcare,
Series 1989,
11.000% 10/01/19 ..................... 3,375 3,324
DE State Economic Development,
Riverside Hospital, Series 1992 A,
9.500% 01/01/22 ..................... 910 1,018
GA Clayton Hospital Authority,
The Woodlands Foundation Inc.,
Series 1991 A,
(d) 05/01/21 (e) ................. 2,500 1,750
ID State Health Facilities Authority,
IHC Hospitals, Inc.,
8.670% 02/15/21 ..................... 1,750 1,870
IL Health Facilities Authority:
Edgewater Medical Center, Series A,
9.250% 07/01/24 ..................... 3,000 3,113
Hinsdale Hospital, Series 1990-C,
9.500% 11/15/19 725 833
MI State Hospital Finance Authority,
Detroit Osteopathic Hospital,
Series 1987-A,
7.500% 11/01/10 ..................... 2,235 2,182
Sarotoga Community Hospital,
Series 1992,
8.750% 06/01/10 ..................... 2,445 2,607
MO Hannibal Industrial Development,
Medical Systems of Northeast Missouri,
Series 1992,
9.500% 03/01/22 ..................... 2,250 2,613
MS Lowndes County Golden Triangle
Regional Medical Hospital,
Series 1990,
8.500% 02/01/10 ..................... 250 268
NC Lincoln County,
9.000% 05/01/07 ..................... 550 608
NJ Health Care Facilities Financing Authority,
Raritan Bay Medical Center,
7.250% 07/01/27 ..................... 1,000 985
TX Tarrant County, Health Facilities
Development Corp.,
10.125% 04/01/21 ..................... 1,600 1,584
VT Educational & Health Buildings
Financing Agency,
7.750% 01/01/13 ..................... 1,185 1,146
WA Washington State Health Care
Facility, Grays Harbor Community Hospital,
Series 1993:
7.200% 07/01/03 ..................... 220 234
8.025% 07/01/20 ..................... 1,480 1,587
--------
25,722
--------
HUMAN SERVICES PROVIDERS - 1.5%
IL Champaign First Mortgage,
Hoosier Care Inc., Series 1989-A,
9.750% 08/01/19 ..................... 1,500 1,603
</TABLE>
See notes to investment portfolio.
2
<PAGE>
INVESTMENT PORTFOLIO - CONTINUED
<TABLE>
<CAPTION>
MUNICIPAL BONDS - CONT. PAR VALUE
-------------------------------------------------------------------------
<S> <C> <C> <C>
HEALTH - CONT.
HUMAN SERVICES PROVIDERS - CONT.
TN Shelby County, Health, Education, & Housing
Facilities Board, Open Arms Development Center:
Series 1992-A,
9.750% 08/01/19 ......................... $ 960 $ 1,104
Series 1992-C,
9.750% 08/01/19 ......................... 935 1,075
-------
3,782
-------
NURSING HOME - 21.0%
AZ Tucson Industrial Development
Authority, Villa Maria Care Center,
10.125% 11/01/21 ......................... 500 475
CO Health Care Facilities Authority:
American Housing Foundation I,
Series 1990,
10.250% 12/01/20 ......................... 1,500 1,671
Denver Health Care Inc.,
10.500% 05/01/19 (e) ..................... 1,400 868
Pioneer Health Care, Series 1989,
10.500% 05/01/19 ......................... 2,000 1,940
FL Flagler County Industrial,
Redevelopment Authority,
South Florida Properties, Series 1988,
10.500% 12/01/18 ......................... 2,480 2,486
FL Gadsden County Industrial Development,
Florida Housing Properties, Inc.,
Series 1988-A,
10.450% 10/01/18 ......................... 1,970 2,036
FL Jacksonville Industrial Development,
Beverly Enterprises,
9.750% 10/01/11 ......................... 970 1,082
FL Leon County, Beverly Enterprises,
Series 1985,
9.800% 06/01/11 ......................... 830 932
FL Volusia County Industrial
Development Authority, Beverly Enterprises,
Series 1987,
9.800% 12/01/07 ......................... 910 962
IA Finance Authority Healthcare Facility,
Mercy Health Initiatives,
Series 1989,
9.950% 07/01/19 ......................... 1,900 1,862
IN Gary Industrial Economic Development,
West Side Health Care Center,
Series 1987 A,
11.500% 10/01/17 ......................... 1,500 1,425
IN Michigan City Health Facilities,
Metropolitan Health Foundation
Inc., Project,
10.000% 11/01/22 ......................... 3,085 2,160
MA Boston, St. Josephs Nursing
Care Center, Inc.
10.000% 01/01/20 (f) ..................... 990 1,094
MA State Industrial Finance Agency,
American Health Foundation Inc.,
Series 1989,
10.125% 03/01/19 ......................... 2,060 2,160
MO Grove Industrial Development Authority,
First Mortgage Health Care Facility,
Heritage Manor, Series 1988,
10.250% 11/01/13 ......................... 1,840 1,748
MO Saint Louis County Industrial
Development Authority,
10.250% 12/01/16 .......................... 1,855 1,892
MO University City Industrial Development
Authority Health Facilities, University
Forest Nursing Care, Series 1989-A,
11.000% 03/01/19 .......................... 3,060 3,209
NJ Economic Development Authority,
Geriatric and Medical Service, Inc.,
Series B,
10.500% 05/01/20 .......................... 2,000 2,168
NM Bloomfield, First Mortgage Medical
Facilities Pilot Development Northwest,
Series 1989,
10.125% 06/01/14 .......................... 2,620 2,620
NM Clovis Industrial Development,
Retirement Ranches Project,
10.750% 04/01/19 .......................... 2,380 2,591
NM Espanola, First Mortgage Medical
Facilities, Pilot Development Southwest,
Series 1988,
10.250% 05/01/13 .......................... 1,810 1,810
NM Silver City First Leasehold Mortgage
Medical Facilities, RC Development,
Series 1988,
10.250% 11/01/13 .......................... 970 970
PA Chester County Industrial Development,
Pennsylvania Nursing Home, Inc.,
Series 1989,
10.125% 05/01/19 .......................... 2,645 2,724
PA Philadelphia Authority for Industrial
Development, First Mortgage, RHA/PA
Nursing Home, Series 1988,
10.250% 11/01/18 .......................... 1,485 1,543
PA Washington County Industrial
Development Authority, Central
States, Series 1989,
10.250% 11/01/19 .......................... 2,000 1,940
</TABLE>
See notes to investment portfolio.
3
<PAGE>
INVESTMENT PORTFOLIO - CONTINUED
<TABLE>
<CAPTION>
MUNICIPAL BONDS - CONT. PAR VALUE
-------------------------------------------------------------------------
<S> <C> <C> <C>
HEALTH - CONT.
NURSING HOME - CONT.
TN Metropolitan Government, Nashville
& Davidson Counties, Health & Education
Facilities, Central States, Series 1989
10.250% 11/01/19 ......................... $ 1,810 $ 1,756
TX Bexar County Health Facilities
Development, Heartway Corp.,
Series 1989-A-1,
10.250% 03/01/19 ......................... 1,905 1,905
TX Whitehouse Health Facilities
Development Corp., Oak Brook Health
Care Center, Series 1989,
10.000% 12/01/19 ......................... 1,845 1,863
VA Beach Development Authority,
Beverly Enterprises, Series 1985,
10.000% 04/01/10 ......................... 1,785 2,001
WI State Health & Educational Facilities,
Metro Health Foundation, Inc.,
10.000% 11/01/22 ......................... 2,775 1,943
-------
53,836
-------------------------------------------------------------------------
HOUSING - 21.1%
ASSISTED LIVING/SENIOR - 1.9%
IL State Development Finance Authority,
Care Institute, Inc.,
8.250% 06/01/25 ......................... 1,300 1,289
MN Roseville, Care Institute, Inc.,
Series 1993,
7.750% 11/01/23 ......................... 1,740 1,568
TX Bell County Health Facilities Development
Corp., Care Institutions, Inc.,
9.000% 11/01/24 ......................... 1,800 1,892
-------
4,749
-------
MULTI-FAMILY - 13.8%
FL Clearwater, Hampton Apartments,
8.250% 05/01/24 ......................... 2,500 2,606
FL Hialeah Housing Authority,
Series 1991,
9.500% 11/01/21 ......................... 3,000 3,101
FL State Housing Finance Agency,
Windsong Apartments, Series 1993-C,
9.250% 01/01/19 ......................... 1,000 1,001
FL West Palm Beach Housing Inc.,
Multi-family Housing: Riviera Beach,
Series 1988-A,
9.750% 07/15/18 (g) ..................... 1,530 536
Cypress Run,
10.500% 03/15/19 (g) ..................... 3,000 1,050
GA Augusta Housing Authority Mortgage,
Mountain Ridge Holdings II,
Series A,
8.960% 09/01/24 ......................... 1,880 1,692
MN Lakeville Multi-family Housing,
Southfork Apartments Project:
Series 1989 A,
9.875% 02/01/20 ......................... 2,570 2,605
Series 1989-B,
(d) 02/01/20 (h) ..................... 1,150 1,795
MN White Bear Lake,
Birch Lake Townhome Project:
Series 1989-A,
10.250% 07/15/19 ......................... 2,200 2,200
Series 1989-B,
(d) 07/15/19 (h) ..................... 800 1,178
NC Durham Urban Development Authority,
Durham Hosiery Mill Project,
7.500% 08/01/29 ......................... 1,595 1,701
NC Eastern Carolina Regional Housing
Authority, Jacksonville New River
Apartments,
8.250% 09/01/14.......................... 2,000 2,008
NY Nyack Housing Assistance
Corp., Plaza Apartments,
7.375% 06/01/21 ......................... 462 455
NY Yorktown Housing Corp.,
Beaveridge Apartments,
7.375% 06/01/21 ......................... 483 484
PA Montgomery County Industrial
Development Authority, Assisted
Living Facility, Series 1993-A,
8.250% 05/01/23 ......................... 870 848
Pass Through Certificates, Series
1993-A,
8.500% 12/01/16 (i) ..................... 5,098 5,225
TN Memphis Center City Finance Corp.,
Multiple Family Housing Board, Riverset
Apartments-Phase II Project, Series 1989-A,
9.500% 10/01/19 ......................... 3,300 3,308
TX Galveston Health Facilities Center,
8.000% 08/01/23 ......................... 1,000 1,011
VA Alexandria Redevelopment
& Housing Authority, Courthouse
Commons Apartments, Series 1990 A,
10.000% 01/01/21 ......................... 1,500 1,508
</TABLE>
See notes to investment portfolio.
4
<PAGE>
INVESTMENT PORTFOLIO - CONTINUED
<TABLE>
<CAPTION>
MUNICIPAL BONDS - CONT. PAR VALUE
-------------------------------------------------------------------------
<S> <C> <C> <C>
HOUSING - CONT.
MULTI-FAMILY - CONT.
VA Roanoke Redevelopment & Housing
Authority, First Mortgage, Mountain
Ridge,
9.250% 11/01/22 ..................... $ 1,000 $ 1,014
-------
35,326
-------
SINGLE-FAMILY - 5.4%
LA Louisiana Housing Finance Agency,
Residual Lien Mortgage, Series 1992,
(7.500% 03/01/95) 09/01/13 (j) ................. 1,000 1,017
MN Washington County Housing &
Redevelopment Authority, Cottages of
Aspen Project,
9.250% 06/01/22 ..................... 1,105 1,111
NE Investment Finance Authority,
Single-family Mortgage,
Series 1990-B,
10.507% 03/15/22 (a) ................. 2,000 2,240
OH Housing Finance Agency, Single-family
Mortgage Revenue, RIB (variable rate),
Series B-4,
9.294% 03/31/31 ..................... 1,025 1,078
TX Bexar County Housing Finance Corp.
GNMA Collateralized Mortgage,
Series 1989-A,
8.200% 04/01/22 ..................... 7,390 7,759
TX Harris County Housing Finance,
Corp., Single-family Housing,
Series 1987,
8.875% 12/01/17 ..................... 610 631
-------
13,836
-------------------------------------------------------------------------
MANUFACTURING - 7.3%
FOOD & KINDRED PRODUCTS - 0.4%
IA Ellsworth Industrial Development,
Bagel Works Project,
Series 1990,
7.500% 01/15/12 ..................... 945 910
-------
FURNITURE & FIXTURES - 0.9%
TN McKenzie Individual Development Board,
10.500% 05/01/16 ..................... 2,193 2,349
-------
MEASURING & ANALYZING INSTRUMENTS - 0.3%
MN Brooklyn Park, TL Systems Corp.,
Series 1991,
10.000% 09/01/16 ..................... 805 827
-------
PAPER PRODUCTS - 5.7%
GA Rockdale County Development
Authority, Solid Waste Disposal, Visy
Paper, Inc., Series 1993,
7.500% 01/01/26 ..................... 5,000 5,069
MI State Strategic Fund:
Blue Water Fiber Project, Series 1994,
8.000% 01/01/12 .................... 2,500 2,375
Great Lakes Pulp & Fibre Project,
10.250% 12/01/16 .................... 5,000 5,219
SC Darlington County,
Industrial Development Authority,
SONOCO Products Co. Project,
6.125% 06/01/25 .................... 2,000 1,938
-------
14,601
-------------------------------------------------------------------------
MINING - 0.6%
METAL MINING - 0.6%
CO Mesa County Industrial Development
Joy Technologies Inc.,
Series 1992,
8.500% 09/15/06 .................... 1,000 1,061
OH Cuyahoga County,
Joy Technologies, Inc.,
8.750% 09/15/07 .................... 550 591
-------
1,652
-------------------------------------------------------------------------
POLLUTION CONTROL REVENUE - 4.8%
IL Bryant Pollution Control Revenue,
Central Illinois Light Co. Project,
5.900% 08/01/23 .................... 5,000 4,812
LA St. Charles Parish Pollution Control
Revenue, Union Carbide Project,
7.350% 11/01/22 .................... 3,000 3,128
PA Beaver County, Industrial Development
Pollution Control, Beaver Valley,
Series 1989-A,
7.750% 09/01/24 .................... 2,500 2,612
SC York County Industrial Revenue,
Hoechst Celanese Corp.,
5.700% 01/01/24 .................... 2,000 1,825
-------
12,377
-------------------------------------------------------------------------
PUBLIC FACILITIES IMPROVEMENT - 3.8%
CO Denver City & County Airport:
Series 1992-C,
6.125% 11/15/25 .................... 5,120 4,736
United Air Lines, Series 1992-A,
6.875% 10/01/32 .................... 1,645 1,631
MN Mille Lacs Capital Improvement
Infrastructure, Band of Chippewa,
Series 1992-A,
9.250% 11/01/12 .................... 1,140 1,283
VI Virgin Islands Public Financing,
Series 1992-A,
7.250% 10/01/18 .................... 2,000 2,062
-------
9,712
-------------------------------------------------------------------------
</TABLE>
See notes to investment portfolio.
5
<PAGE>
INVESTMENT PORTFOLIO - CONTINUED
<TABLE>
<CAPTION>
MUNICIPAL BONDS - CONT. PAR VALUE
-------------------------------------------------------------------------
<S> <C> <C> <C>
PUBLIC INFRASTRUCTURE - 6.7%
AIRPORT - 2.0%
CO Denver City and County Airport,
Series 1992 B,
7.250% 11/15/23 ..................... $ 2,885 $ 2,948
IN Airport Authority,
7.100% 01/15/17 ..................... 2,000 2,065
-------
5,013
-------
TURNPIKE/TOLL ROAD/BRIDGE - 4.8%
CA San Joaquin Hills Transcorridor
Agency, Senior Lien Toll Road:
Series 1993:
(d) 01/01/23 ..................... 14,500 2,103
5.000% 01/01/33 ..................... 6,130 4,705
7.000% 01/01/30 ..................... 865 876
MA State Industrial Finance Agency,
Series 1990,
9.000% 10/01/20 ..................... 2,410 2,630
PR Commonwealth of Puerto Rico,
Highway & Transportation Authority,
3.575% 07/01/09 (b) ................. 640 (c) 255
TX Harris County Industrial Development
Corp., Continental Airlines,
7.950% 07/01/19 ..................... 1,800 1,669
-------
12,238
-------------------------------------------------------------------------
REFUNDED/ESCROW/SPECIAL OBLIGATIONS (K) - 1.6%
AL Marshall County Health Care Authority
Hospital, Guntersville-Arab Medical
Center, Series 1988,
10.250% 10/01/13 ..................... 2,000 2,307
DE Wilmington, Riverside Hospital,
Series 1988A,
10.000% 10/01/03 ..................... 250 298
IL Health Facilities Authority, Hinsdale
Hospital, Series 1990-C,
9.500% 11/15/19 ..................... 1,255 1,558
-------
4,163
-------------------------------------------------------------------------
RETAIL TRADE - 1.1%
APPAREL & ACCESSORY STORES - 0.1%
MA State Industrial Finance Agency,
House of Bianchi, Inc.,
8.750% 06/01/18 ..................... 345 358
-------
MISCELLANEOUS RETAIL - 1.0%
OH Lake County Economic Development,
North Madison Properties, Series 1993,
8.819% 09/01/11 ..................... 765 798
VA Virginia Beach Development Authority,
SC Diamond Associates, Inc.,
8.000% 12/01/10 ..................... 1,535 1,552
-------
2,350
-------------------------------------------------------------------------
SERVICES - 1.0%
HOTELS/CAMPS & LODGING - 1.0%
MN Burnsville Commercial Development,
Holiday Inn Project,
10.600% 06/01/06 ..................... 2,500 2,581
-------------------------------------------------------------------------
SOLID WASTE - 1.7%
LAND FILL - 0.5%
MA State Industrial Finance Agency, Peabody
Monofill Associates, Inc., Project,
9.000% 09/01/05 ...................... 1,260 1,329
-------
MISCELLANEOUS DISPOSAL - 0.6%
IL Development Financial Authority, Solid
Waste Disposal, Ford Heights Waste Project,
Series 1994,
7.875% 04/01/11 ..................... 1,500 1,491
-------
RESOURCE RECOVERY - 0.6%
MA State Industrial Finance Agency,
Refusetech, Series 1993 A,
6.300% 07/01/05 ..................... 500 508
VI Water and Power Authority, Electric
Systems, Series 1991-A,
7.400% 07/01/11 ..................... 1,000 1,040
-------
1,548
-------------------------------------------------------------------------
TAX ALLOCATION - 2.1%
CA Carson Improvement, Series 1992,
7.375% 09/02/22 ..................... 200 208
IL Development Finance Authority,
City of Marion Project,
Series 1991,
9.625% 09/15/21 ..................... 2,500 2,547
IL Metropolitan Pier & Exposition Authority,
McCormick Place Expansion Project,
Series A,
(d) 06/15/15 ..................... 10,000 2,725
-------
5,480
-------------------------------------------------------------------------
TRANSPORTATION/COMMUNICATION/ELECTRIC/
GAS & SANITATION - 3.3%
AIR TRANSPORTATION - 0.8%
NY New York City Industrial
Development Agency, American
Airlines,
6.900% 08/01/24 ..................... 2,000 2,037
-------
GAS SERVICES - 0.0%
IL Hennepin Individual Development
Methchem Corp., Series 1989,
10.250% 01/01/05 (e) ................. 2,650 80
-------
</TABLE>
See notes to investment portfolio.
6
<PAGE>
INVESTMENT PORTFOLIO - CONTINUED
<TABLE>
<CAPTION>
MUNICIPAL BONDS - CONT. PAR VALUE
--------------------------------------------------------------------------
<S> <C> <C> <C>
TRANSPORTION/COMMUNICATION/ELECTRIC/
GAS & SANITATION - CONT.
TRANSPORTATION - 2.5%
NY Metropolitan Transportation Authority,
Commuter Facilities Board, Series 7
Project,
5.625% 07/01/16...................... $ 7,000 $ 6,396
--------------------------------------------------------------------------
UTILITY - 2.7%
CO-GENERATION - 0.4%
FL Martin County Industrial
Development Authority, Indiantown
Co-generation Project,
7.875% 12/15/25...................... 1,000 1,084
------
MUNICIPAL ELECTRIC - 2.3%
MN Southern Minnesota Municipal Power
Agency, Series 1994 A,
(d) 01/01/20...................... 10,000 2,262
SC State Public Service Authority,
Series A,
6.250% 01/01/22 (l). 3,500 3,522
------
5,784
--------------------------------------------------------------------------
WATER & SEWER - 1.7%
LA Public Facility Belmont Water
Authority,
9.000% 03/15/24 820 850
MA State Industrial Finance Agency,
Environmental Service Project,
Series 1994 A,
8.750% 11/01/21 1,000 1,015
MS Five Lakes Utility District,
8.250% 07/15/24 500 509
NJ Economic Development Authority,
Hills Development Co.,
Series 1988,
10.500% 09/01/08 2,000 2,078
------
4,452
--------------------------------------------------------------------------
Total investments (cost $257,202) (m) 253,753
--------------------------------------------------------------------------
SHORT-TERM OBLIGATION - 0.7%
--------------------------------------------------------------------------
VARIABLE RATE DEMAND NOTES (N)
IA Des Moines Methodist Hospital,
2.800% 08/01/15 1,800 1,800
--------------------------------------------------------------------------
OTHER ASSETS & LIABILITIES, NET - 0.4% 900
--------------------------------------------------------------------------
NET ASSETS - 100% $256,453
--------------------------------------------------------------------------
</TABLE>
Notes to investment portfolio:
(a) These securities, or a portion thereof, with a total market value of $3,808
are being used to collateralize the delayed delivery purchase indicated in
note (l) below.
(b) This security is a variable-rate instrument; on July 1, 1998, it will change
to a fixed rate instrument. Interest is accrued daily on the notional
amount and the applicable interest rates.
(c) Notional amount.
(d) Zero coupon bond.
(e) Non-income producing.
(f) This is a restricted security, which was acquired on June 1, 1990, at a cost
of $997. This security represents 0.4% of the Fund's net assets at June 30,
1995.
(g) This issuer has filed under Chapter 11 of the Federal Bankruptcy Code.
Income is not being accrued.
(h) Accrued interest accumulates in the value of the security and is payable at
redemption.
(i) This is a restricted security, which was acquired on August 27, 1993, at a
cost of $5,203. This security represents 2.0% of the Fund's net assets at
June 30, 1995.
(j) Currently zero coupon. Shown parenthetically is the interest rate to be
paid and the date the Fund will begin accruing this rate.
(k) The Fund has been informed that each issuer has placed direct obligations of
the U.S. Government in an irrevocable trust, solely for the payment of the
interest and principal.
(l) This security has been purchased on a delayed delivery basis, for settlement
at a future date beyond the customary settlement time.
(m) Cost for federal income tax purposes is the same.
(n) Variable rate demand notes are considered short-term obligations. Interest
rates change periodically on specified dates. These securities are payable
on demand and are secured by either letters of credit or other credit
support agreements from banks. The rates listed are as of June 30, 1995.
ACRONYM NAME
------- -----------------------
RIB Residual Interest Bonds
See notes to financial statements.
7
<PAGE>
FINANCIAL STATEMENTS
<TABLE>
<CAPTION>
STATEMENT OF ASSETS & LIABILITIES (UNAUDITED)
June 30, 1995
(in thousands except for per share amount)
--------------------------------------------------------------------------
<S> <C>
ASSETS
Investments at value (cost $257,202).......................... $253,753
Short-term obligations........................................ 1,800
--------
255,553
Cash.................................................. $1,088
Receivable for:
Interest........................................... 5,315
Investments sold................................... 140
Other................................................. 148 6,691
------ --------
Total assets......................................... 262,244
LIABILITIES
Payable for:
Investments purchased................................ 3,392
Distributions........................................ 1,503
Accrued:
Deferred Trustees fees............................... 2
Other................................................ 894
------
Total liabilities.................................... 5,791
--------
Net assets at value for 30,919
shares of beneficial interest outstanding.................. $256,453
--------
Net asset value per share..................................... $8.29
--------
COMPOSITION OF NET ASSETS
Capital paid in............................................ $286,697
Undistributed net investment income........................ 926
Accumulated net realized loss.............................. (27,721)
Net unrealized depreciation................................ (3,449)
--------
$256,453
========
</TABLE>
<TABLE>
<CAPTION>
STATEMENT OF OPERATIONS (UNAUDITED)
Six months ended June 30, 1995
(in thousands)
--------------------------------------------------------------------------
<S> <C> <C>
INVESTMENT INCOME
Interest...................................................... $10,986
EXPENSES
Management fee........................................ $1,024
Transfer agent........................................ 46
Bookkeeping fee....................................... 33
Trustees fees......................................... 9
Custodian fee......................................... 8
Audit fee............................................. 22
Legal fee............................................. 52
Reports to shareholders............................... 4
Other................................................. 35 1,233
------ -------
Net investment income................................. 9,753
=======
NET REALIZED AND UNREALIZED GAIN (LOSS)
ON PORTFOLIO POSITIONS
Net realized loss............................................. (5,380)
Net unrealized appreciation
during the period........................................... 15,345
-------
Net gain.............................................. 9,965
-------
Net increase in net assets from operations.................... $19,718
========
</TABLE>
See notes to financial statements.
8
<PAGE>
FINANCIAL STATEMENTS - CONTINUED
<TABLE>
<CAPTION>
STATEMENT OF CHANGES IN NET ASSETS
------------------------------------------------------------------------------------------------------
(unaudited)
Six months
ended Year ended
June 30 December 31
---------- -----------
1995 1994
---------- -----------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS
Operations
Net investment income.................................................. $ 9,753 $ 19,053
Net realized loss...................................................... (5,380) (4,036)
Net unrealized appreciation (depreciation)............................. 15,345 (18,320)
-------- --------
Net increase (decrease) from operations......................... 19,718 (3,303)
Distributions
From net investment income.............................................. (9,232) (18,860)
-------- --------
Total increase (decrease)..................................... 10,486 (22,163)
NET ASSETS
Beginning of period.................................................... 245,967 268,130
-------- --------
End of period (including undistributed net investment income of $926
and $382, respectively).............................................. $256,453 $245,967
======== ========
NUMBER OF FUND SHARES
Outstanding at
End of period........................................................ 30,919 30,919
======== ========
</TABLE>
See notes to financial statements.
9
<PAGE>
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
NOTE 1. INTERIM FINANCIAL STATEMENTS
In the opinion of management of Colonial High Income Municipal Trust (the
Fund), the accompanying financial statements contain all normal and recurring
adjustments necessary for the fair presentation of the financial position of the
Fund at June 30, 1995, and the results of its operations, the changes in its net
assets, and the financial highlights for the six months then ended.
--------------------------------------------------------------------------------
NOTE 2. ACCOUNTING POLICIES
The Fund is a Massachusetts business trust, registered under the Investment
Company Act of 1940, as amended, as a non-diversified, closed-end, management
investment company. The Fund may issue an unlimited number of shares. The
following significant accounting policies are consistently followed by the Fund
in the preparation of its financial statements and conform to generally accepted
accounting principles.
--------------------------------------------------------------------------------
SECURITY VALUATION AND TRANSACTIONS
Debt securities generally are valued by a pricing service based upon market
transactions for normal institutional-size trading units of similar securities.
When management deems it appropriate, an over-the-counter or exchange bid
quotation is used.
Short-term obligations with a maturity of 60 days or less are valued at
amortized cost.
Portfolio positions which cannot be valued as set forth above are valued at
fair value under procedures approved by the Trustees.
Security transactions are accounted for on the date the securities are
purchased or sold.
Cost is determined and gains and losses are based upon the specific
identification method for both financial statement and federal income tax
purposes.
The Fund may trade securities on other than normal settlement terms. This
may increase the risk if the other party to the transaction fails to deliver and
causes the Fund to subsequently invest at less advantageous prices.
--------------------------------------------------------------------------------
FEDERAL INCOME TAXES
Consistent with the Fund's policy to qualify as a regulated investment
company and to distribute all of its taxable and tax-exempt income, no federal
income tax has been accrued.
--------------------------------------------------------------------------------
INTEREST INCOME, DEBT DISCOUNT AND PREMIUM
Interest income is recorded on the accrual basis. Original issue discount
is accreted to interest income over the life of a security with a corresponding
increase in the cost basis; market discount is not accreted. Premium is
amortized against interest income with a corresponding decrease in the cost
basis.
--------------------------------------------------------------------------------
DISTRIBUTIONS TO SHAREHOLDERS
Distributions to shareholders are recorded on the ex-date.
The amount and character of income and gains to be distributed are
determined in accordance with income tax regulations which may differ from
generally accepted accounting principles.
--------------------------------------------------------------------------------
NOTE 3. FEES AND COMPENSATION PAID TO AFFILIATES
MANAGEMENT FEE
Colonial Management Associates, Inc. (the Adviser) is the investment
adviser of the Fund and furnishes accounting and other services and office
facilities for a monthly fee equal to 0.80% annually of the Fund's average
weekly net assets.
--------------------------------------------------------------------------------
BOOKKEEPING FEE
The Adviser provides bookkeeping and pricing services for $18,000 per year
plus 0.0233% of the Fund's average weekly net assets over $50 million.
--------------------------------------------------------------------------------
OTHER
The Fund pays no compensation to its officers, all of whom are employees of
the Adviser.
The Fund's Trustees may participate in a deferred compensation plan which
may be
10
<PAGE>
NOTES TO FINANCIAL STATEMENTS - CONTINUED
terminated at any time. Obligations of the plan will be paid solely out of the
Fund's assets.
--------------------------------------------------------------------------------
NOTE 4. PORTFOLIO INFORMATION
During the six months ended June 30, 1995, purchases and sales of
investments, other than short-term obligations, were $32,117,851 and
$31,011,505, respectively.
Unrealized appreciation (depreciation) at June 30, 1995, based on cost of
investments for both financial statement and federal income tax purposes was:
<TABLE>
<S> <C>
Gross unrealized appreciation............... $ 9,051,467
Gross unrealized depreciation............... (12,500,585)
------------
Net unrealized depreciation............... $ (3,449,118)
============
</TABLE>
--------------------------------------------------------------------------------
CAPITAL LOSS CARRYFORWARDS
At December 31, 1994, capital loss carryforwards available (to the extent
provided in regulations) to offset future realized gains were approximately as
follows:
<TABLE>
<CAPTION>
YEAR OF CAPITAL LOSS
EXPIRATION CARRYFORWARD
---------- ------------
<S> <C>
1998................ 3,066,000
1999................ 3,140,000
2000................ 3,157,000
2001................ 5,578,000
2002................ 6,551,000
-----------
$21,492,000
===========
</TABLE>
Expired capital loss carryforwards, if any, are recorded as a reduction of
capital paid in.
To the extent loss carryforwards are used to offset any future realized
gains, it is unlikely that such gains would be distributed since they may be
taxable to shareholders as ordinary income.
--------------------------------------------------------------------------------
OTHER
There are certain risks arising from geographic concentration in any state.
Certain revenue or tax related events in a state may impair the ability of
certain issuers of municipal securities to pay principal and interest on their
obligations.
The Fund may focus its investments in certain industries, subjecting it to
greater risk than a fund that is more diversified.
--------------------------------------------------------------------------------
NOTE 5. RESULTS OF SPECIAL SHAREHOLDERS MEETING
On February 15, 1995, a special meeting of shareholders was held and a new
Management Agreement between the Trust and Colonial Management Associates, Inc.
was approved that became effective upon the completion of the merger of the The
Colonial Group, Inc. and Apple Merger Corporation, a subsidiary of Liberty
Financial Companies, Inc. on March 24, 1995. Out of the shares of beneficial
interest outstanding on December 9, 1994, 21,251,869 voted for the new
Management Agreement, 583,187 voted against and 520,575 abstained. Of the shares
of beneficial interest outstanding that abstained 231,471, represented broker
non-votes.
--------------------------------------------------------------------------------
NOTE 6. RESULTS OF ANNUAL SHAREHOLDER MEETING
On May 31, 1995, the Annual Meeting of Shareholders was held to elect six
Trustees and to ratify the selection of Price Waterhouse LLP as independent
accountants for the fiscal year ending December 31, 1995. On March 6, 1995, the
record date of the Meeting, the Fund had outstanding 30,918,576 shares of
beneficial interest. The votes cast at the Meeting were as follows:
Election of six Trustees:
<TABLE>
<CAPTION>
FOR AGAINST
--- -------
<S> <C> <C>
Robert J. Birnbaum 18,370,556 429,009
Tom Bleasdale 18,374,965 487,601
James E. Grinnell 18,373,730 488,836
Richard W. Lowry 18,374,615 487,951
John J. Neuhauser 18,375,621 486,944
George L. Shinn 18,369,285 493,281
</TABLE>
11
<PAGE>
NOTES TO FINANCIAL STATEMENTS - CONTINUED
The Board of Trustees also consists of Lora S. Collins, William D. Ireland, Jr.,
William E. Mayer, John A. McNeice, Jr., James L. Moody, Jr., Robert L. Sullivan
and Sinclair Weeks, Jr.
Ratification of the selection of Price Waterhouse LLP as independent
accountants:
<TABLE>
<CAPTION>
FOR AGAINST ABSTAIN
--- ------- -------
<S> <C> <C>
18,280,501 225,721 356,343
---------------------------------------------------
</TABLE>
12
<PAGE>
FINANCIAL HIGHLIGHTS
Selected per share data, total return, ratios and supplemental data throughout
each period.
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
(unaudited)
Six Months
ended
June 30 Year ended December 31
----------- -----------------------------------------------------------
1995 1994 1993 1992 1991 1990
----------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
Net asset value - Beginning of period............. $ 7.960 $ 8.670 $ 8.780 $ 8.910 $ 9.000 $ 9.350
-------- -------- -------- -------- -------- --------
Income (loss) from investment operations:
Net investment income............................ 0.316 0.616 0.671 0.694 0.742 0.784
Net realized and unrealized gain (loss)
on investments................................. 0.313 (0.716) (0.106) (0.140) (0.074) (0.276)
-------- -------- -------- -------- -------- --------
Total from investment operations.............. 0.629 (0.100) 0.565 0.554 0.668 0.508
-------- -------- -------- -------- -------- --------
Less distributions declared to shareholders:
From net investment income...................... (0.299) (0.610) (0.675) (0.684) (0.758) (0.827)
In excess of net investment income.............. -- -- -- -- -- (0.031)
-------- -------- -------- -------- -------- --------
Total distributions declared to shareholders.. (0.299) (0.610) (0.675) (0.684) (0.758) (0.858)
-------- -------- -------- -------- -------- --------
Net asset value - End of period................... $ 8.290 $ 7.960 $ 8.670 $ 8.780 $ 8.910 $ 9.000
-------- -------- -------- -------- -------- --------
Total return based on net asset value (a)......... 8.03% (b) (0.75)% 6.57% 6.61% 7.71% 5.65%
======== ======== ======== ======== ======== ========
Total return based on market value................ 17.05% (9.83)% 7.96% 3.51% 5.76% 3.90%
======== ======== ======== ======== ======== ========
Ratios to average net assets:
Expenses........................................ 0.96% (c) 1.03% 0.97% 0.96% 0.97% 0.96%
Net investment income........................... 7.62% (c) 7.44% 7.58% 7.86% 8.30% 8.56%
Portfolio turnover............................... 25% (c) 20% 29% 15% 17% 23%
Net assets at end of period (000)................. $256,453 $245,967 $268,130 $269,848 $273,207 $273,864
</TABLE>
(a) Total return at net asset value assuming all distributions reinvested.
(b) Not annualized.
(c) Annualized.
13
<PAGE>
QUARTERLY RESULTS OF OPERATIONS (UNAUDITED)
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Three months ended
-----------------------------------------------
JUNE 30, 1995 MARCH 31, 1995
---------------------- ---------------------
(000) PER SHARE (000) PER SHARE
------- --------- ------- ---------
<S> <C> <C> <C> <C>
Total investment income.......................................................... $ 5,567 $ 0.180 $ 5,419 $0.175
Net investment income............................................................ $ 4,936 $ 0.160 $ 4,817 $0.156
Net realized and
unrealized gain (loss)........................................................ $(4,423) $(0.143) $10,864 $0.351
Market value per share:
High......................................................................... $ 8.000 $8.000
Low.......................................................................... $ 7.625 $6.875
</TABLE>
<TABLE>
<CAPTION>
Three months ended
-------------------------------------------------------------------------------------------------
DECEMBER 31, 1994 SEPTEMBER 30, 1994 JUNE 30, 1994 MARCH 31, 1994
-------------------- --------------------- ------------------- ----------------------
(000) Per share (000) Per share (000) Per share (000) Per share
------- --------- ------- --------- ------- --------- -------- ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Total investment income......... $ 5,404 $ 0.175 $ 5,298 $ 0.171 $ 5,516 $ 0.178 $ 5,485 $ 0.177
Net investment income........... $ 4,727 $ 0.153 $ 4,645 $ 0.150 $ 4,865 $ 0.157 $ 4,816 $ 0.156
Net realized and
unrealized gain (loss)....... $(6,551) $(0.211) $(1,950) $(0.062) $(2,124) $(0.065) $(11,731) $(0.378)
Market value per share:
High................................... $6.375 $ 6.625 $ 8.375 $ 8.750
Low.................................... $5.500 $ 5.750 $ 7.625 $ 7.875
</TABLE>
At June 30, 1995, there were 4,783 shareholder accounts.
14
<PAGE>
DIVIDEND REINVESTMENT PLAN (UNAUDITED)
The Trust generally distributes net investment income monthly and capital
gains annually. Under the Trust's Dividend Reinvestment Plan (the "Plan"),
shareholders may elect to have all distributions reinvested automatically in
additional shares of the Trust. Shareholders not making such election will
receive all distributions in cash, paid by check and mailed directly to the
recordholder, from the dividend paying agent.
Shareholders participating in the Plan will receive distributions in the form
of shares of the Trust. If the market price of the shares on the distribution
payment date is equal to or greater than the net asset value, Plan participants
will be issued shares at the higher of net asset value or 95% of the market
price. In circumstances in which the net asset value of Trust shares is more
than 5% below their market price, Plan participants will be issued shares
through the Plan at a price exceeding net asset value. If net asset value
exceeds the market price, or the distribution is payable only in cash, shares
will be bought in the open market for the accounts of Plan participants. If the
market price surpasses the net asset value before such purchasing is completed,
the average per share price may exceed the net asset value of the shares,
resulting in the acquisition of fewer shares than if the distribution had been
in newly-issued shares.
All Plan accounts receive monthly written confirmations of all transactions.
Shares purchased under the Plan are ordinarily held in uncertificated form,
although participants have the right to receive certificates for whole shares
held in their account.
Each shareholder's proxy includes shares purchased pursuant to the Plan. The
automatic reinvestment of distributions does not relieve participants of any
income tax payable on the distributions. Participants may recognize capital
gains or ordinary income for federal income tax purposes in an amount equal to
the market value of shares received under the Plan.
Fees and expenses of the Plan, other than brokerage charges, will be paid by
the Trust. No brokerage charges are incurred on shares issued directly by the
Trust. Participants will bear a pro-rata share of brokerage charges incurred on
open market purchases.
A Plan participant may terminate his or her participation by written notice
to the Plan administrator. The Plan may be amended or terminated on 90 days
written notice to the Plan participants. Upon withdrawal by any participant or
any termination of the Plan, certificates for whole shares will be issued and
cash payments will be made for any fractional shares. All correspondence
concerning the Plan, including requests for information, should be directed to
The First National Bank of Boston, the Trust's dividend disbursing agent and
administrator of the Plan, at P.O. Box 1681, Boston, Massachusetts 02105,
Attention: Dividend Reinvestment Department.
--------------------------------------------------------------------------------
ABOUT OUR COVER...
[GRAPHIC]
The symbol on the cover of this Report represents the Fund's primary investment
focus on municipal bonds.
--------------------------------------------------------------------------------
Colonial High Income Municipal Trust mails one shareholder report to each
shareholder address. If you would like more than one report, please call our
Literature Department at 1-800-248-2828 and additional reports will be sent to
you.
CUSTODIAN, TRANSFER AGENT, REGISTRAR AND DIVIDEND DISBURSING AGENT
The First National Bank of Boston
100 Federal Street
Boston, MA 02110
(617) 575-2900
15
<PAGE>
[LOGO]
[COLONIAL
MUTUAL FUNDS]
[GRAPHIC]
COLONIAL
HIGH INCOME
MUNICIPAL TRUST
--------------------------
SEMIANNUAL REPORT
JUNE 30, 1995
[LOGO]
[COLONIAL
MUTUAL FUNDS]
[LOGO] Printed on recycled paper.
HI-03/165B-0895
